He said there was “an almost suffocating" level of union influence inside the Labor Party.

But Ms Gillard said the union movement still had an important future within the ALP.

“I believe our great trade union movement is important to Australian society and to representing the needs of working people," she told reporters in Sydney on Tuesday.

“It was the trade union movement, shoulder to shoulder with the Labor party, that fought back and got rid of Work Choices."

Ms Gillard said the union influence on the ALP had been addressed at the party’s national conference in December and had been examined in an internal party review by former state premiers Steve Bracks and Bob Carr, along with Labor senator John Faulkner.

“I can, of course, understand there are many who will argue for different policy conclusion, but our policy ... is out there and a settled policy."

The ACTU reportedly says plans to use mining tax proceeds to increase the superannuation guarantee levy from 9 to 12 per cent, and an automatic co-contribution of up to $500 a year for workers on $37,000 or less, don’t go far enough.

But Ms Gillard said the government had taken steps to address imbalances in the system.

“We’ve moved to change the system to better benefit low-income workers," she said.